ADP, Gallup jobs report point to job growth in June

posted at 11:51 am on July 2, 2014 by Ed Morrissey

Since Friday is a federal holiday, the Bureau of Labor Statistics will release its jobs report for June 2014 tomorrow. Both ADP and Gallup have their usual leading indicator surveys out this morning, and the news looks relatively good from both. The private sector added 281,000 jobsaccording to the ADP estimate, the highest growth in more than a year:

Private sector employment increased by 281,000 jobs from May to June according to the June ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. …

Goods-producing employment rose by 51,000 jobs in June, up from 31,000 jobs gained in May. The construction industry added 36,000 jobs over the month, more than double the May number. Meanwhile, manufacturing added 12,000 jobs in June, up slightly from last month.

Service-providing employment rose by 230,000 jobs in June, up from 148,000 in May. The ADP National Employment Report indicates that professional/business services contributed 77,000 jobs in June, up from 46,000 in May. Expansion in trade/transportation/utilities grew by 50,000, up from May’s 36,000. The 11,000 new jobs added in financial activities was about double last month’s number.

The job growth, if sustained by the BLS, gives some reason for optimism after the -2.9% GDP move in Q1. Job creation in the ADP report has been somewhat muted in 2014, although the BLS figures have exceeded ADP’s measures recently. This chart shows the trend over the last year:

In the past, ADP has overshot the official BLS numbers more often than underestimating them, though. This jump looks a little unusual, especially with May’s durable-goods drop of 1%, but most other indicators have been generally positive. Even if this falls back into an older ADP pattern of overestimation, the range of expectations would be between 170,000 and 200,000 for tomorrow’s report — not great, but certainly not what one would expect after a contraction of -2.9% in the previous quarter either.

The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, continued to climb in June. The percentage of Americans employed full time for an employer last month, 45.0%, is up from 44.5% in May and ranks as one of the highest rates since tracking began in January 2010. The high of 45.7% was measured in October 2012.

It should be noted with some caution that this measure is relatively new, implemented well after the Great Recession and not tracking particularly well to the BLS’ own measures of workforce participation. Its all-time high of 45.7% in October 2012 correlates to 63.7% in the civilian workforce participation rate and 58.8% in the employment-population ratio, both near decades-long lows. The latter is only marginally better at 58.9% for May 2014, while the former sank to a 36-year low of 62.8% in both April and May.

Stiil, it’s a significant uptick, and goes with other measures of improvement in Gallup’s survey:

Gallup’s unadjusted U.S. unemployment rate for June was 6.8%, down from 7.0% in May — marking the lowest monthly rate Gallup has measured since it first began tracking employment in January 2010. This continues an almost unbroken decline in unemployment since early 2011, when the rate peaked above 10%.

Gallup’s seasonally adjusted U.S. unemployment rate for June dropped even further, from 7.2% to 6.5%. This is also the lowest Gallup has recorded for this survey. This rate is calculated by applying the adjustment factor the government used for the same month in the previous year. Last year, the government adjusted June’s rate downward by 0.3 points. The exact adjustment the government will use for June 2014 will not be known until Thursday’s BLS release.

Gallup uses similar methodology as the BLS does for these numbers, but polls at different times. We’ll see if the BLS figures pick up on the same growth Gallup does, but these two reports should raise the expectations for tomorrow’s announcement from BLS.

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Why do we even bother with these reports as anything other than propaganda? I get posting them but giving them any credibility is silly. We have more than enough history to show these reports to be pure state sanctioned fiction; we should ridicule as such until it is no longer legal to do so. Then we should do the same “underground.”

And can someone please tell me why this article doesn’t point out all of the previous months that have LATER been “revised”?

Seriously, HA, why are you lapping up these “numbers” like their actually accurate and truthful, when virtually every month for the last 6 years has had to be “revised” later, because the numbers were complete BS?

How many times are you willing to be lied to and yet still report it all, each and every month as gospel?

listening to o whining about economic patriotism…lol. That’s why we need more cheap illegal child laborers? I also love that Facebook is leading the charge on amnesty..Zuckerberg can’t afford to pay Americans?

But let’s set a more modest goal: return to more or less full employment in 5 years –which means seven lean years of depressed employment. To keep up with population growth over those 7 years, the United States would have had to add 84 times 127,000 or 10.668 million jobs. (If that sounds high, bear in mind that we added more than 20 million jobs over the 8 Clinton years). Add in the need to make up lost ground, and we’re at around 18 million jobs over the next five years — or 300,000 a month.

So that’s a useful benchmark. Even if we add 300,000 jobs a month, we’re looking at a prolonged period of suffering — a huge cost from the Great Recession. So that’s kind of a minimal definition of success. Anything less than that, and it’s bad news.

After a first quarter when GDP shrank/turned and fled/rolled over on its back and peed, business is now hiring more people than EVAH!

I think this proves Nancy Pelosi’s theorem that unemployment is good for the economy, or something. Or maybe the reverse; knowing that the jobs numbers would be fabulous in the second quarter (reducing the amount of unemployment payments stimulating the economy) the first quarter contracted in anticipation.

Or something.

Anyway, yay!!!!!!!

/our resident proggie econ 101 graduates (who actually received an Incomplete but only because the Prof didn’t like them)

Until next month, when it will be revised down, like every other month in the last 6 years…unexpectedly, of course.

Meople on July 2, 2014 at 11:54 AM

I have no idea how this idea gets spread, but not only is it not true, the opposite has been true in recent years for the government-reported numbers. The government’s reported payroll numbers have been revised upwards more often than downwards in the past few years.

See all the reports and revisions here: http://www.bls.gov/web/empsit/cesnaicsrev.htm. In 2013, the average revision was up 21k. So far in 2014, the initial BLS payroll reports were revised upwards by 31k, 47k, and 11k in the final revisions for January, February, and March. April’s number was revised downward by 6k, but the final revision will be published tomorrow.

The claim that these numbers are usually inflated in the first report and then quietly revised downwards is simply not true.

There’s a study that just came out that revealed the truth about the alien invasion. All of the increase in the jobs created numbers are less than the numbers estimated to have invaded this country.

All the jobs created have gone to illegal aliens. Great for somebody but not for unemployed citizens.

platypus on July 2, 2014 at 12:04 PM

Well, not all of them were illegal, I think. I though many were invited in on work visas in technical fields, because golly, there just aren’t enough qualified Americans……..who will work as cheap as those corporations want to pay. Of course a lot of those on visas of them overstayed their visas, thus making them illegal. Wonderful government oversight we’ve got, no?

Why would anyone trust any of these numbers anymore, since there’s always an “unexpected” downward revision?

Slab Bulkhead on July 2, 2014 at 12:09 PM

Just grabbing a headline. It’ll be revised after November.

BobMbx on July 2, 2014 at 12:04 PM

See my comment above. It applies to the government numbers, not the ADP report (since I can’t find a table of revisions for that), but the claim that the numbers are generally revised downwards isn’t true, and in fact the opposite is true.

Next, Obumbles eases penalties on and reduces work age for child labor. The new age for exempting children from work will now be 4 years of age. I mean, we’ve got so many idle hands huddled together in detention centers yearning to be free and eager to earn their keep doncha know, and you know what they say about idle hands.

No number this regime puts out is truthful or accurate in the least. We know this because they started cooking the books on unemployment, the first day Obama took office, by removing the number of people who drop off the unemployment ranks each month.

We’re also seeing it now with ObamaCare “enrollees”. Not only are we discovering many of the enrollees are illegal aliens, but many more are looking like their completely fictional. Sound familiar? Sounds just like the time we found out 80% of Obama’s facebook followers were completely fake as well.

His latest column explains why the June numbers will be good – but that it is little more than cooking the books and spin…

There should be one more good employment report, but then — watch out.

I’ve already explained what I call government P.E.E. — Performance Enhancing Estimates. They are kinda like Performance Enhancing Drugs, only P.E.E. is legal and government economists seem to think they are doing us a favor by making economic statistics look stronger than they really are without explaining what they are doing.

…

The Labor Department’s Bureau of Labor Statistics added 234,000 jobs in April that it believes — and no doubt hopes — were created by newly formed companies that weren’t included in its monthly surveys. (Again, why not just consult tax records?) And it added 205,000 of these perhaps phantom jobs in May.

The numbers I just gave you are before seasonal adjustments — so only about 40,000 or so of those phantom figures show up in the bottom line that headliners will pick up in the next day’s newspapers.

In other words, about 40,000 of the 234,000 total jobs — after seasonal adjustment — that the Labor Department said were created in May might not really exist. In fact, it’s quite possible that the economy was so much slower this spring than normal that companies were quietly going out of business and the job losses from those closures weren’t being properly recorded by the government.

In June 2013, Labor added 140,000 jobs to the pre-seasonally adjusted total. The P.E.E. for this June — Thursday’s number — should be around the same 140,000.

Not as much as April and May, but enough to keep the people who are hanging onto the new job creation figure happy.

Now the gritty: During the summer months, the number of phantom jobs drops sharply, which should cause people to be disappointed by the monthly figures. The September job report (announced in early October) will have a deduction and could be the most disappointing announcement of all.

Regardless of the job numbers that come tomorrow from the Feds, the labor participation rate will remain at levels not seen since Carter, and this remains the worst economic recovery since the Great Depression by all measurements.

I don’t see how what you’re saying addresses what I’m saying. You claimed that the initial numbers put out are eventually revised downwards. I showed that that’s not true. Even if all numbers, both initial and revised, are a total lie as you say, your claim is still not true. Government revisions have generally upward.

See my comment above. It applies to the government numbers, not the ADP report (since I can’t find a table of revisions for that), but the claim that the numbers are generally revised downwards isn’t true, and in fact the opposite is true.

tneloms on July 2, 2014 at 12:35 PM

Ah, is that why GDP was “revised” down to -2.9% last week? Because the economy is doing just jim-dandy?

Somebody is totally full of shiite… Jobs did not increase at the same time that the economy was contracting by -2.9%, if you can actually be fooled into believing that it did, then you do not and never will understand mathematics.

I don’t see how what you’re saying addresses what I’m saying. You claimed that the initial numbers put out are eventually revised downwards. I showed that that’s not true. Even if all numbers, both initial and revised, are a total lie as you say, your claim is still not true. Government revisions have generally upward.

tneloms on July 2, 2014 at 12:44 PM

I’m saying EVERY unemployment number they’ve put out, since Obama got into office, has been a lie, because their numbers don’t include the number of people that drop OFF the unemployment ranks each month. The Regime’s number exclude them entirely.

And given the fact we now have over 92 million people NOT working in this country, I would say that’s an extremely relevant number.

The government’s reported payroll numbers have been revised upwards more often than downwards in the past few years.

See all the reports and revisions here: http://www.bls.gov/web/empsit/cesnaicsrev.htm. In 2013, the average revision was up 21k. So far in 2014, the initial BLS payroll reports were revised upwards by 31k, 47k, and 11k in the final revisions for January, February, and March. April’s number was revised downward by 6k, but the final revision will be published tomorrow.

The claim that these numbers are usually inflated in the first report and then quietly revised downwards is simply not true.

tneloms on July 2, 2014 at 12:32 PM

Good post and thanks for the link.

Interestingly, and bearing in mind Paul Krugman’s “we need 300,000 each month since 20009 and even then we’ll have a prolonged period of suffering” article I’d linked above, I didn’t realize that we’ve only been getting close to 200,000 (at best) a month since 2012:

Since 2012 the economy has consistently added between 2 million and 2.4 million jobs per year

My neighbor is an engineer who’s been out of work for nearly a year, with very few prospects during that time. Recently, however, he’s had three calls from headhunters within a two week period. One company is Swiss-owned, one is Volvo, and one is Canadian-owned.

If he gets one of these jobs, I guess it will show up as a job in the stats, but I’m not sure, considering the foreign-ownership of those companies, that it really signals anything good for America.

This is just anecdotal and not statistically significant, I admit. But I find it interesting.

Some people suggested that huge downward revision in the 1st quarter was revised so much to hide the real drop in the second quarter that they do not want because that means we have been in a recession all year so far.

I don’t know.

For me the economy has improved but still money is tight so, I really can’t say, our business has hired quite a lot this year.

I know it sounds bad but I want the economy to be bad before the voting in November, and that may make me see things the way I wish, instead of how they are.

If you are working and have skills there are jobs for you – most of this is moving the deck chairs around – which is why the labor participation rate is not really moving much at all. If you have been out of work 6 months to a year or more, your prospects aren’t very good.

– Factory orders (which adds non-durable good orders to the previously-reported -1.0% crater of durable orders) fell by 0.5%, driven by the collapse in defense spending. Non-defense spending increased by 0.2% (not adjusted for inflation). The “good” news is that non-durable goods pulled total May factory orders barely ahead of March (0.30%), after durable goods orders for May ended up behind March’s orders.

– Countering the big construction jobs add in the ADP report, construction spending increased by only 0.1% in May according to the Census Bureau.

– Median household income in May increased by a “statisitically-insignificant” $240 (0.45%).

On the bright side, we’re on track to have unemployment reported in the 5′s just in time for the election.

Eggleston, are you out there to tell us how that works?

rogerb on July 2, 2014 at 1:12 PM

You rang? The math is simple – less people looking for work, given the same number of people working, reduces the unemployment rate because the labor force shrank.

There has been a major disconnect between the number of employed versus the number of jobs since the Great Recession. Over the last year, there were 433,000 more jobs created than the increased number of employed. Between May 2009 (near the end of the Great Recession) and now, there have been 1,103,000 more jobs created than the increased number of employed.

On the flip side, go a bit further back to May 2008 (while in the middle of the NBER-definition of the Great Recession, it is just before the classical definition of a recession), and there were 304,000 more jobs created since then than the the increased number of employed. Go back to May 2007 and the numbers are nearly equal (only 47,000 more jobs created since then than the increased number of employed).

I’m saying EVERY unemployment number they’ve put out, since Obama got into office, has been a lie, because their numbers don’t include the number of people that drop OFF the unemployment ranks each month. The Regime’s number exclude them entirely.

Meople on July 2, 2014 at 12:49 PM

What you are saying is nonsense. The U3 number that is widely reported as the unemployment rate does not include “discouraged workers” as you say but that has nothing to do with Obama. The U3 has always been that way. You can go back and find people on the left complaining about the exact same thing under bush II (and further back to clinton, bush I, reagan…).

Your contention that the U3 is the current administration lying is sheer ignorance on your part. Personally I think other measures such as the U4-6 might be better measures of “unemployment” or at least should be present alongside the U3 but that’s a matter of how best to get the real situation across from a series of imperfect measures, not a matter of the BLS lying.

Why do we even bother with these reports as anything other than propaganda? I get posting them but giving them any credibility is silly. We have more than enough history to show these reports to be pure state sanctioned fiction; we should ridicule as such until it is no longer legal to do so. Then we should do the same “underground.” Skwor on July 2, 2014 at 12:05 PM

I agree, which brings us back to why?

National Review 06-26-14 According to a major new report from the Center for Immigration Studies (CIS), net employment growth in the United States since 2000 has gone entirely to immigrants, legal and illegal. Using data from the Bureau of Labor Statistics, CIS scholars Steven A. Camarota and Karen Zeigler found that there were 127,000 fewer working-age natives holding a job in the first quarter of 2014 than in 2000, while the number of immigrants with a job was 5.7 million above the 2000 level.

Because the native-born population grew significantly, but the number working actually fell, there were 17 million more working-age natives not working in the first quarter of 2014 than in 2000.

This is where perception meets deception. The public, i.e. American citizens, know they cannot find jobs. Jobs available only a few years ago are no longer offered.

I know from friends in retail, that the main business is on EBT day, while the hard good stock is piling up in the bins. Big box stores here have three cashiers working a row of 20 empty registers

That is the real measure of jobs. When people buy the extras

I remember when Bush senior kept saying the economy wasn’t all that bad. It wasnt all that bad, for his friends. He had the same kind of numbers to prove it

Ah, is that why GDP was “revised” down to -2.9% last week? Because the economy is doing just jim-dandy?

Meople on July 2, 2014 at 12:45 PM

I didn’t say the economy was doing well. I said that your claim about the numbers always being revised downward was false, which it is. I cited numbers for both the government’s report and ADP’s report that showed that it’s not usually revised downward.

Now you’re talking about the GDP number. Does that mean you admit you were wrong about the payroll numbers? The 2014 Q1 GDP number was in fact significantly revised downward. Here is a list of previous revisions: http://www.bea.gov/national/xls/GDP-GDI%20vintage%20history.xls. Looking at recent history:
2014Q1 was revised downward
2013Q4 was revised downward
2013Q3 was revised upward
2013Q2 was revised upward
2013Q1 was revised downward
2012Q4 was revised upward
2012Q3 was revised upward
2012Q2 was revised downward
2012Q1 was revised upward
2011Q4 was revised upward
2011Q3 was revised downward
2011Q2 was revised upward
2011Q1 was revised downward

Are you still going to make the argument that the number is usually revised downward? You can believe it’s all lies, but the claim that the numbers are eventually revised downward is demonstrably false.

Who gives a phuck? You’d rather yack about that like you caught than deal with the reality: Obama sucks and you’re partly responsible.

CW on July 2, 2014 at 6:24 PM

It’s something that’s repeated constantly here, so I thought it was important to correct people’s misperceptions. I think that correcting misperceptions and citing facts to give people a better understanding is more helpful than simply adding to the echo chamber by saying that the economy isn’t doing well, but if you want me to I will: the economy isn’t doing well.